Analog Devices Inc (NASDAQ:ADI) Q4 2017 Earnings Conference Call - Final Transcript

Nov 21, 2017 • 10:00 am ET


Analog Devices Inc (NASDAQ:ADI) Q4 2017 Earnings Conference Call - Final Transcript


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Prashanth Mahendra-Rajah

our revenue guidance by end market is not perfectly correlated with our actual results, this will also be the last quarter in which we provide our revenue outlook by end market. Of course, we will continue to guide you to an overall revenue range. We are planning for gross margins to remain relatively stable sequentially and to be in the range of 70.5% to 71%.

Operating expenses are estimated to be in the range of $440 million to $450 million and include an additional week's worth of activity related to the 14 week quarter. On a 13 week basis, operating expenses are expected to decrease in the mid single digit sequentially. Based on these inputs, we expect operating margins in the first quarter of 2018 to be in the range of approximately 40% to 42% and for diluted earnings per share, excluding special items, to be in the range of a $1.20 to a $1.36.

So to wrap it up, this was a terrific quarter performance and wraps up a very strong year of revenue growth, margin expansion, EPS growth and free cash flow generation. Looking ahead, we're encouraged by a number of positive indicators across our business, including the strong secular growth drivers, a robust opportunity pipeline and access to customers at an unprecedented level, which combined with our strong free cash flow and commitment to deleveraging, will continue to drive value for our shareholders.

Now, before we move to the Q&A, I have an additional announcement. To help continue the successful integration of Linear Tech, I am delighted to announce that Ali Husain has accepted the position of CFO for ADI's power division supporting Steve Pietkiewicz and will be relocating with his family to Sunny, California. Vince and I would like to take this opportunity to thank Ali for the tremendous work he has done with the investment community and we look forward to working with him in this new role to drive even greater shareholder value in the future.

Moving forward, Mike Lukareli who many of you already know from his work with Ali over the past couple of years, will be your main point of contact in IR. I have enjoyed getting to know Mike over the past few weeks as someone who is both energetic and knowledgeable. I'm sure you'll find Mike to be a great resource for your investment research on ADI.

And so with that, I'll turn it over to Ali for our Q&A session.

Ali Husain

Great, thanks Prashanth. It's been a privilege working with the investment community and I look forward to this new challenge. So let's get to the Q&A session. Please limit yourself to one question. After we provide you with our initial response, we'll give you an opportunity for a follow up question. So operator let's get to our first question.